Wednesday, January 14, 2015

What to Expect When Bank of America (BAC) Reports Earnings Thursday

NEW YORK (TheStreet) -- Bank of America is expected to report its fourth quarter financial results tomorrow morning, before the opening bell. The major U.S. bank is expected to post fourth quarter earnings of 31 cents per share, higher than the 29 cents it reported a year earlier. Analysts are expecting revenue of $20.94 billion for the period, below the $21.49 billion the firm reported in the same quarter a year ago. Must Read: Warren Buffett's 25 Favorite Stocks STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more. Shares of Bank of America are down 3.47% to $15.88 in afternoon trading today. Charlotte, NC-based Bank of America is a bank holding company and a financial holding company that serves individual consumers, small and middle market businesses, institutional investors, large corporations and governments. Separately, TheStreet Ratings team rates BANK OF AMERICA CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation: "We rate BANK OF AMERICA CORP (BAC) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. Among the primary strengths of the company is its expanding profit margins over time. We feel these strengths outweigh the fact that the company has had sub par growth in net income." Highlights from the analysis by TheStreet Ratings Team goes as follows: The gross profit margin for BANK OF AMERICA CORP is currently very high, coming in at 86.27%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -0.97% is in-line with the industry average. BAC, with its decline in revenue, slightly underperformed the industry average of 5.2%. Since the same quarter one year prior, revenues slightly dropped by 3.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share. BANK OF AMERICA CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, BANK OF AMERICA CORP increased its bottom line by earning $0.91 versus $0.25 in the prior year. For the next year, the market is expecting a contraction of 54.9% in earnings ($0.41 versus $0.91). In its most recent trading session, BAC has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels. Net operating cash flow has significantly decreased to -$450.00 million or 105.46% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower. You can view the full analysis from the report here: BAC Ratings Report STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.


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